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Brexit: employment law

On November 10, 2016, Parliament published a Briefing Paper setting out the Government’s position in relation to employment rights of workers following the UK’s exit from the EU. Whilst the Government may believe that the Briefing Paper clearly sets out its position, on closer analysis it seems to raise more questions than it answers, and has given rise to some misunderstandings.

Key parts of UK employment law are derived from European law which provides minimum standards for domestic employment law. Some EU law has been implemented by way of primary legislation, for example the Equality Act 2010. These rights are only alterable by primary legislation. Other EU law, such as agency workers’ and working time rights, has been introduced by way of implementing secondary legislation. These laws can be revoked or amended by secondary legislation which is much quicker and less open to scrutiny. In addition, some EU rights, such as those contained in EU treaties, have direct effect in the UK. In theory, following withdrawal from the EU, these rights would automatically cease to apply absent any saving legislation. All EU derived employment rights could be amended or removed following Brexit.

In the November 10 Briefing Paper, the Government has set out its position in relation to four issues.

“The “Great Repeal Bill” (which will repeal the European Communities Act), will convert all current EU employment law into domestic law, whatever the future relationship the UK has with the EU.” In a debate in the UK parliament on November 7, 2016 on “Exiting the EU and workers’ rights”, the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, made it clear that “all rights derived from membership of the EU will be imported into UK law through legislation in this house.” An example given is that the Working Time Directive will be transposed into UK law so that there is continuity.

“The direct effect of relevant EU rights will persist post Brexit”. As set out above the Government wishes to give businesses and workers certainty.

“Judgments of the European Court of Justice (ECJ) will be given effect in domestic law at the point of exit.” ECJ case law has interpreted the way in which EU legislation should be applied. For example, case law on the calculation of holiday pay or on the rights to rest breaks for certain workers.

“The Prime Minister has confirmed that workers’ existing legal rights will be guaranteed during her period in office.” This is to avoid concern that immediately following Brexit, the Government would seek to amend existing legislation. This means that although the Government is likely to come under pressure to repeal or amend certain laws, there will be no imminent changes to workers’ rights – including on such matters as working time, agency workers’ rights and holidays, which many employers would like to change.

Although the Briefing Paper is seeking to provide some certainty for employers and employees, there are points which remain subject to confusion:

When the Great Repeal Bill “converts” current EU legislation into domestic law, will this be implemented by primary or secondary legislation? The Government has suggested that this will be determined by the terms of the Great Repeal Bill. However, it is not clear what EU legislation is being referred to. One of the statements by the Secretary of State during the parliamentary debate was “Of course, the Working Time Directive, like all other directives that are part of EU law, will be transposed into UK law so that there is continuity.” However, the UK already has in place legislation implementing the Working Time Directive into UK law, namely the Working Time Regulations 1998.

What if there is a conflict between an EU directive and our own implementing legislation? The current Working Time Regulations are interpreted in accordance with the relevant EU Directive, but, as drafted do not directly replicate the wording of the directive. In addition, the UK regulations differ from the EU Directive in that UK workers are entitled to 28 days’ paid holiday per year (1.6 weeks additional to that required under the EU Directive). Does the Secretary of State mean that the Working Time Regulations should be read in line with the EU Directive (which is effectively the situation now) or that the EU Directive itself should be transposed into UK law?

What is the status of past judgments of the ECJ? The Government in the parliamentary debate made it clear that the starting position of the Government is that “EU derived law, from whatever quarter, will be transferred into United Kingdom law in full at the point of exit.” It does not give any further details as to how this will be effected in practice. In addition, following this “transfer” will the Supreme Court in the UK be able to overrule the ECJ decisions?

What about cases which have been referred from the UK courts to the ECJ pre-Brexit, but on which judgment has not been decided at the point of exit? Again, there is no further discussion of this point, but is something which must be considered as part of the Brexit negotiations.

How can the Prime Minister confirm that workers’ existing legal rights will be guaranteed during her period in office? Although this could apply to amendments to legislative provisions, it is not possible for a guarantee that no court decisions will arise during her time in office which could have an impact on all workers’ legal rights.

Although the Briefing Paper seeks to give assurances to workers and employers alike, much of the detail is unclear. The Great Repeal Bill and further parliamentary discussion is awaited with interest.

Brexit: planning for the future as negotiations continue

We have created this Brexit blog to provide up to date analysis and legal commentary as the new Brexit landscape evolves, addressing key questions and topics of interest to our clients across the different industry sectors in which they operate.